Aldi gives pay rise after sales exceed £10bn for first time

Aldi is increasing pay for store staff after it enjoyed a bumper Christmas with sales up 15% in December.

The German grocer said its sales in the UK and Ireland would exceed £10bn for the first time in 2017, after it opened a further 76 stores, taking its total to 762.

Sales growth was driven by a 30% surge in Aldi’s premium Specially Selected ranges year-on-year during December. Mince pies, sweetcured gammon joints topped with a gingerbread crumb, Aberdeen Angus beef roasting joints and Irish cream liqueur all sold well.

Matthew Barnes, chief executive officer of Aldi UK and Ireland, said: “This was our busiest-ever Christmas as millions of festive shoppers switched to Aldi from more expensive food retailers.

“Although we saw strong growth across all categories, the performance of our premium Specially Selected range in particular surpassed all expectations.”

Aldi said it was increasing the minimum hourly rate of pay for store assistants to £8.85 nationally, a 3.75% rise, and £10.20 in London, a 4.6% boost, from 1 February.

The company, which also pays employees for breaks unlike some chains, claimed it was reaffirming its position as the UK’s highest-paying supermarket.

The rates match the independently verified living wage recommended by the Living Wage Foundation, but Aldi is not formally accredited to the scheme as not all its workers are guaranteed the rate as a minimum.

Aldi’s performance suggests another strong year for the discounters, putting further pressure on the major supermarkets. Bruno Monteyne, an analyst at Bernstein Research, said 10% of Aldi’s growth came from new store launches and another 2.5% was the result of price inflation.

He said Aldi’s profit margins were likely to come under pressure as chains such as Tesco, Sainsbury’s and Asda reduced prices amid rising costs.

Convenience stores are also thought to have taken business from the supermarkets towards the end of 2017, partly because they benefited from being allowed to open for longer on Sundays, including Christmas Eve.

Grocery wholesaler Nisa, which serves thousands of independent corner shops, said its sales had risen 1.7% at established stores in the 10 weeks to New Years Eve. The Co-op’s sales rose 6.2% at established stores in the two weeks to 1 January.

Content originally published on https://www.theguardian.com/business/2018/jan/04/aldi-pay-rise-sales by Sarah Butler